The respondent sued the appellant for payment of US$58,500 being the balance for 1,500 army rucksack bags sold and delivered to the appellant between May 2013 for a total price of US$64,000 inclusive of VAT. On 21 May 2013, the appellant made part payment of US$5,500 and signed an acknowledgment of debt for the balance of US$58,500. The appellant produced a further acknowledgment of debt dated 10 September 2013 undertaking to pay by 30 September 2013. The appellant initially denied liability, claiming the respondent merely used her company as a conduit to sell to the army and alleged the acknowledgments were forged. She later abandoned this plea, admitted liability but pleaded prescription. The respondent's managing director testified that she granted various extensions at the appellant's request, with a final extension to 31 December 2013, and continued to phone the appellant demanding payment through to 2016. The appellant denied these extensions. Summons was issued on 17 November 2016.
The appeal succeeded partially. The High Court's order was set aside and substituted with: (a) Judgment granted in the sum equivalent to US$58,500 in RTGS calculated at the prevailing interbank rate; (b) Interest on said amount at the prescribed rate from 31 December 2013 to date of payment in full; (c) Costs of suit on a legal practitioner and client scale.
1) Express or tacit acknowledgment of debt through requests for extensions of time to pay interrupts the running of prescription under s 18(1) of the Prescription Act [Chapter 8:11], and prescription begins to run afresh under s 18(2) from the date of the extension. 2) Where an obligation to pay a debt is extended or novated beyond the effective date of 22 February 2019, a new obligation is created that falls outside the ambit of s 4(1)(d) of S.I. 33/19, and therefore the 1:1 USD to RTGS conversion rate does not apply. 3) Payment should instead be made in RTGS dollars at the prevailing interbank rate to cushion creditors from inflation and prevent debtors benefiting from delay. 4) A litigant who is proven to have lied to the court may be considered unworthy of belief on all other contentious issues.
The Court made observations about the appellant's "unbecoming dishonest conduct" and noted that her vacillation and continuous novation of payment dates pushed the obligation beyond the effective date. The Court commented that payment at the prevailing interbank rate would "cushion the respondent from the vagaries of inflation and prevent the appellant benefitting from her own delay in paying the judgment debt." These observations emphasize the equitable considerations underlying the monetary remedy granted.
This case is significant for clarifying the application of Zimbabwe's currency conversion provisions following the introduction of RTGS dollars. It distinguishes between debts and obligations arising before versus after the effective date of 22 February 2019 under S.I. 33/19. The case establishes that where payment obligations are extended or novated beyond the effective date, new obligations are created that fall outside the 1:1 conversion rate applicable to pre-existing debts. The case also reinforces principles regarding interruption of prescription through acknowledgment of debt and extensions of time to pay under s 18 of the Prescription Act. Additionally, it demonstrates how a litigant's dishonesty in pleadings affects their credibility on all issues and can justify punitive costs orders.